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Labour productivity boost key to sustainable development

Update: May, 12/2015 - 08:52

Vietnamese workers rank high in ASEAN skills competitions, but its labour productivity remains lower than other countries, Nguyen Anh Tuan of the Viet Nam Productivity Institute tells Ha Noi Moi.

Could you give us an analysis of Viet Nam's labour productivity in comparison with other countries?

The country's labour productivity has increased by 3.5 per cent annually since 2005.

It has reached about VND74.3 million (US$3,500) per labourer, according to recent statistics. In general, the country has recorded a stable increase in labour productivity. But there is still a big gap between Viet Nam and many others countries in Asia.

Data from 2012 showed Viet Nam's productivity was about a 15th that of Singapore, a 9th of Japan's, a 7th of South Korea's and a 3rd of Thailand's. I think we should strive more to narrow the gap.

What do you think are the reasons behind the gap?

Labour productivity is affected by two factors: capital power and total factor productivity (TFP). TFP in economics is also called multi-factor productivity – the strengthening of investment capital in production and business activities. So, infrastructure and transport construction will help boost labour productivity.

Thus, with the same quantity of human resources but more preferable conditions, entrepreneurs will have more capacity to boost their production. Labour capacity will also improve, which will lead to an increase in labour productivity.

In fact, as Viet Nam is a developing country, more investment capital power would play an important role in improving socio-economic growth. However, to maintain economic development and help the nation catch up with others countries in the region, Viet Nam needs to focus more on improving labour productivity through an increased use of science and technology.

The country also needs to improve labour quality, and effectively allocate human and financial resources.

Some have said increasing labour productivity means people will get less work and unemployment will increase. What do you think about this?

In technical terms, labour capacity is measured by the rate between production output and labour input. An increase of labour productivity can be reached by an increase of production output or a decrease of labour input.

In business, if companies try to improve labour capacity by decreasing the number of workers, they will obviously increase the unemployment rate.

However, in total long-term development, when an increase of labour productivity occurs, it will help boost market competitiveness and provide more opportunities for market expansion.

What concrete measures are being taken to improve national labour productivity?

At the 8th session of the 13th National Assembly, Prime Minister Nguyen Tan Dung reported on measures that Government will take to improve labour productivity.

Those measures are: restructuring the agricultural sector; constructing new rural areas; encouraging bio-tech and information technology applications; increasing mechanisation, technological modernisation and automation; reducing production costs; improving product quality; and promoting domestic and foreign financial sources for investment in socio-economic infrastructure.

The measures also include improving the quality of education and vocational training.

The Viet Nam Productivity Institute will consult the Government and the Ministry of Science and Technology on creating policies on labour productivity.

They will also research human resource training and build new models for labour productivity. — VNS

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